Distributed Ledger Technology Use Cases in the Real Estate Ecosystem

Credit Suisse Group AG, U.S. Bancorp, Wells Fargo & Co., and Western Asset Management Co. announced they’ve successfully tested the distributed ledger technology to track mortgage-backed securities. “Structuring securities is complex, involving many different parties, manual processes, duplicated documents and data in different formats,” said David Rutter, CEO of R3. The group conducted this pilot program using private-label securities. R3 plans to expand the distributed ledger technology to other types of asset-backed securities and deliver a commercially viable product to the market. “Distributed ledger technology will increasingly improve security around data, not just for capital markets but across numerous other industries,” said Penny Morgan, global securities operations manager at Western Asset Management. (Bloomberg News, 01/18/18)

…Every real estate transaction goes through the multiple listing service (MLS), which tracks what agents represent which clients, contracts, listing agreements, appraisals and more. However, the MLS is notoriously fragmented. The information is decentralized and restricted [and] …often out-of-date as well, which hampers an agent’s ability to make comparisons and spot trends. Blockchain technology can be used to overcome these barriers within the MLS.

Title Records

Title records are another decentralized, challenging-to-access aspect of the real estate buying/selling process. …The blockchain could provide a central title database for the entire country to securely store and instantly access historical title records, allowing for the streamlining of title transfer in a property sale.

Transactions

The third area of real estate that the blockchain will transform is the efficiency and the security of transactions. …Blockchain technology streamlines the real estate ecosystem by enabling people to securely and efficiently share data and money. It makes information more accessible, cuts out middlemen, and reduces the risk of fraud and theft. A more secure, speedier, trusted process for buying and selling property is good for everyone involved. (Forbes, Matthew Murphy, 01/12/18).

Excerpted from the January 2018 edition of ‘The Disruption Report’ by the Canfield Press, available by subscription.